Commentary

A4.466 Accounting for income tax deducted from payments

Administration and compliance

A4.466 Accounting for income tax deducted from payments

A4.466 Accounting for income tax deducted from payments

The return for a return period must show the amount of all 'section 946 payments' made by the company in that period, and the amount of income tax for which the company is accountable in respect of those payments (see A4.465)1. The income tax in respect of payments required to be included in a return is due 14 days after the end of the return period, whether or not an assessment has been made2.

If the tax is not paid by the due date or if HMRC have reason to believe that an item has been omitted from a return, or that the return is otherwise incorrect, they may make an assessment to recover any tax underpaid; the tax at such an assessment is due within 14 days of the issue of the notice of assessment (but see below regarding interest on unpaid tax)3.

The return may include a claim to set off against that liability any income tax deducted from a payment received by the company in the accounting period in which that return period falls4. This means that tax on payments received in a return period can be set first against tax due on payments made in that period, any surplus being carried back against tax paid in a previous return period (in the same accounting period). Any tax on payments received not so set off is carried forward for set-off against tax due on payments made in a subsequent return period

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial